With the rally of some sort at the end of the week, crude posted only modest falls after black thursday. WTI fell $2.79 and Brent $1.78, it could have been worse but conflicting pressures remain obstinate even confusing. For example, Libya was the primary reason for the Thursday fall as traders expected a swift return of a short 1m b/d onto the market, as it happened two workers at the Sharara field were kidnapped and now we are back to square one.

Along with the Norwegian strike escalating and France being refused an Iran waiver the oil market is delicately balanced, with increased production primarily from Saudi Arabia and Russia as well as a modest amount elsewhere it will be fine but margins for error are strictly limited, it may come down to using the US SPR… And the rig count shows us little with overall units up 2 at 1054 and oil u/c at 863 last week.

SDX Energy

More good news from SDX as they announce a successful production test at the SD-4X well at South Disouq in Egypt. The well flowed at a maximum rate of 30.4 MMscfd during an 8 hour clean up period then was shut in for 8 hours with no pressure decline. Then by varying the choke sizes the well flowed for two successive 12 hour periods at average rates of 5.4 MMscfd and 8.6 MMscfd respectively and one extended flow period of 24 hours at 10.5 MMscfd. The well is now shut in for 120 hours then it will be suspended before being connected to local production facilities, in total 23.38 MMscf of gas was produced in the test.

The company has also announced that the acquisition of 240km² of 3D seismic has commenced in the Gharb Centre in Morocco, this should take between 45 and 60 days and will be processed and interpreted in the 4th quarter of this year.

This news from Egypt means that the company's plan to achieve a plateau of 50 MMscfd of conventional natural gas looks like being easily met, ‘additional confidence' is the phrase Paul Welch uses and with more drilling ongoing is likely to be exceeded, maybe by quite a bit. The share price, virtually unchanged this morning, does not do justice to what is the firing up of a key part of the company's strategy.

Zenith Energy

Zenith has provided a detailed RNS this morning regarding its proposed acquisition in Indonesia and also with regard to operations in Azerbaijan. News that the company is not proceeding with the proposed acquisition does not come as a surprise after the due diligence process ‘evidenced negative discrepancies largely exceeding 5% of the book values declared in the financial statements dated February 28th 2018'. Zenith is not the only company that has experienced such difficulties in country and whilst this is disappointing it leaves the management clear to concentrate on Azerbaijan.

In Azerbaijan, the company report that Mr Mike Palmer has resigned and that they have appointed David Sadoway as Operations manager with effect from 1st September. Mr Sadoway has significant experience in workovers and completions in the country and elsewhere so should be able to hit the ground running. This should coincide with the arrival of the new rig and the autumn months will be crucial as Zenith starts to prove up the significant hydrocarbons in country.

Pantheon Resources

Following the sad death of Bobby Gray it seemed inevitable that Pantheon would have to shake up the relationship in the Tyler and Polk County project and today they announce that they hope to acquire Vision's interests there. The challenge is substantial, the company say it is to be non cash, unsurprisingly, accretive to PANR shareholders and will be financed either by equity, warrants (premium priced of course), a success based royalty or some other non equity consideration. This would bring with it operatorship after which Pantheon are intending to enter a farm-out process to bring in partner(s) to ‘finance future drilling operations'.

Although it is a daunting task, with equally challenging chance of success, this scenario is probably the only one available to the company. It has to buy out Vision whilst maintaining their upside, take over operatorship and then sell down a good chunk of the project to finance the drilling campaign. And this with a notably tricky operational history but also still with potential upside.

And Finally...

The World Cup ended with France beating Croatia 4-2 with two dodgy goals and poor reffing but VAR comes out of the process mainly with credit. England looked a touch dispirited and lost the 3rd place play-off to Belgium 2-0. Harry Kane however, has the Golden Boot award for his trophy cabinet.

At Wimbledon Djoko beat Anderson in straight sets after both had had extended semi finals, I know they want to change the rules but these long final sets are rare fun…

At the German MotoGP Jorge Lorenzo's improving Ducati stormed away from the line, followed by his next years team mate Marquez on the Honda. Marquez hounded him for 12 laps before diving into the lead. Valentino Rossi, also passed Lorenzo who was struggling with deteriorating tyres, and tried hard to stay with Marquez until the Honda rider got the message and pulled away to his 9th successive Sachsenring win and a 46 point Championship lead. Rossi's 2nd. place was his best result this year, followed by Yamaha team mate Maverick Vinales in 3rd. but Lorenzo's tyre problems saw him slip back to finish 6th.Cal Crutchlow slid out of a strong 6th position with 20 laps to go but KTM mounted Bradley Smith sporting his St. Georges flag helmet came a superb 10th showing that, along with Lorenzo, receiving their P45s was perhaps the wake up call they needed.

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